SEIYU KOGYO Co.,Ltd. (9170) Stock Price

Seiyu Kogyo is a company primarily engaged in the collection, transportation, and intermediate processing of construction-related industrial waste and contaminated soil, as well as their recycling and reuse, centered in the Greater Tokyo Area. The company also provides general civil engineering services such as road paving and water/sewage infrastructure work. By handling waste processing through to reuse in-house, the company has built a circular business model that connects construction sites with environmental services.

The company's main customers are local governments, major general contractors, and construction companies. Revenue comes primarily from collection and transportation services, intermediate processing contracts, and sales of recycled materials such as recycled aggregate and improved soil. Operating multiple treatment facilities and approximately 117 vehicles centered in Tokyo, the company secures stable demand by serving a wide range of waste sources throughout the Greater Tokyo Area.

The business is divided into three main pillars: environmental services, construction services, and environmental engineering services. The environmental services division processes construction debris and sludge through crushing, dry, and wet methods to create recycled materials. The construction services division undertakes paving and water/sewage infrastructure work as both prime and subcontractor on public projects. The environmental engineering division handles soil surveys, contamination remediation, and analysis work. Additionally, subsidiaries provide on-site traffic control and event security services.

The company aims to achieve medium-term growth in revenue and improved gross profit margins through three core business pillars: environmental services, construction, and environmental engineering. Specifically, in environmental services, the company plans to enhance processing capacity to achieve a 99% or higher recycling rate, while increasing revenue through expanded intake volumes and a broader range of handled materials. The industrial waste treatment market is valued at approximately 5.2 trillion yen, and the company sees significant growth opportunities supported by urban infrastructure renewal demand and government policy targets for carbon reduction by 2030 and carbon neutrality by 2050.

Priority investment areas include processing facility capital expenditure and human resource development. Concrete measures include improving utilization rates of intermediate processing equipment, reducing costs through production management via magnetic separation (DME) technology, and expanding shipments of recycled products to lower raw material costs. This strategy will reduce reliance on secondary processing outsourcing to cement manufacturers, thereby improving profit margins. The company leverages approximately 117 vehicles and multiple processing facilities centered in the Tokyo metropolitan area as a competitive advantage, serving stable demand from municipalities and major construction firms.

For new market development and business expansion, the company is actively pursuing large public works contracts, targeting projects valued at 500 million yen or more and participation in joint ventures (JVs). The company plans to strengthen group subsidiaries' construction track records and engineer capacity to qualify for large-scale projects in Tokyo's 23 special wards, with plans to relocate headquarters within the ward area. Additionally, the company is exploring expansion into Chiba and Saitama prefectures by targeting construction companies in those regions, aiming to diversify revenue sources and expand service offerings.

In technological innovation, the company is advancing research in recycling technologies, including development of "energy-efficient, low-CO2, resource-efficient concrete" with government subsidies. The company aims to promote circular use of concrete materials through horizontal recycling technology for aggregates and sand, reducing transportation energy while delivering high-quality recycled materials for on-site use. On the financial front, the company is strengthening its financial position to support large-scale capital investments and is considering utilizing capital markets as needed, advancing business sophistication through both technological and financial means.